Judges already citing Wal-Mart ruling in environmental cases
Feb 07, 2012

A major Supreme Court ruling from last year that is widely predicted to reduce the number of successful class-action claims against big companies is already being cited in environmental cases.

 
Lawrence Hurley, E&E reporter
Greenwire:

A major Supreme Court ruling from last year that is widely predicted to reduce the number of successful class-action claims against big companies is already being cited in environmental cases.

In Wal-Mart v. Dukes, the court ruled that a massive class action of 1.5 million women employees at big-box retailer Wal-Mart Stores Inc. who said they were discriminated against in violation of Title VII of the Civil Rights Act should not be certified.

Class certification is granted when a judge is persuaded that large numbers of related claims against a single defendant can be handled as a single case. It is a type of litigation that can lead to sizable judgments and big pay days for trial lawyers.

Although the court was unanimous in holding that the class should not be certified in the Wal-Mart case, Justice Antonin Scalia's majority opinion -- to which four other justices joined -- went further, shutting down the case and making it clear that it will be harder in the future for plaintiffs' attorneys to make huge class actions against big companies work.

Scalia stressed the need for "commonality" of claims. In other words, the bigger the company, the more delegation of authority, the more individual workplaces, the harder it will become to certify a class-action suit.

The case has been seized upon by corporate defendants in a wide range of class-action cases, including those involving environmental claims. Although the Wal-Mart case was in federal court, it is being mentioned both in federal and state court rulings.

The 3rd U.S. Circuit Court of Appeals, the Louisiana Supreme Court and a state court in Michigan are among courts that have already cited the Wal-Mart decision in rulings against plaintiffs in environmental cases.

"The Wal-Mart decision will likely have a major impact in environmental cases because in those cases plaintiffs' lawyers often try to bundle together highly individualized claims that have nothing in common," said Theodore Boutrous, the Gibson, Dunn & Crutcher attorney who argued the case for Wal-Mart.

The Supreme Court has now explicitly rejected what he called the "trial by formula" approach that many plaintiffs' attorneys take, he added.

Scott Summy, a trial lawyer with Baron Budd in Dallas, said the ruling "will obviously be used by corporate America in an attempt to avoid class certification in many contexts, including environmental cases."

Impact on water-pollution rulings

Judge Leopold Borrello likely holds the distinction of being the first jurist to cite Wal-Mart v. Dukes in the environmental context.

On July 18 of last year, barely a month after the Supreme Court issued its decision, Borrello issued a ruling denying class certification in a case against Dow Chemical Co.

The plaintiffs alleged in Henry v. Dow that Dow had released dioxin into the Tittabawassee River flood plain from its plant in Midland, Mich.

In his decision, Borrello noted that the Supreme Court ruling "has far-reaching implications for certification of class action lawsuits, including the present case."

Relying heavily on Wal-Mart, Borrello found "the plaintiff has failed to provide this court with sufficient information to establish that the commonality prerequisite to class certification is satisfied in this case."

In the 3rd Circuit case, Gates v. Rohm and Haas, the federal appeals court tackled claims made under the Comprehensive Environmental Response Compensation and Liability Act, commonly known as the Superfund law.

Residents of McCullom Lake Village in Illinois sued Rohm and Haas Co. and other chemical companies that operated a facility nearby. The plaintiffs asserted that the chemical companies had dumped polluted wastewater that seeped into an underground aquifer.

Judge Anthony Scirica mentioned Wal-Mart on multiple occasions in upholding a district judge's decision to deny class certification.

At one point he wrote that "in light of the Supreme Court's recent decision ... we question whether the kind of medical monitoring sought here can be certified" although the court ultimately did not decide that specific issue.

Later in the opinion, on a different question, he noted that the Supreme Court had "recently highlighted the importance of cohesiveness" in class-action claims.

The Louisiana Supreme Court issued its ruling that cited the Wal-Mart case on Dec. 6.

In Price v. Martin, the court reversed a lower court that had certified a class action against Alexandria, La.-based Dura-Wood Treating Co. The plaintiffs claimed that the company had discharged creosote and wastewater into a creek.

Noting that Louisiana law mirrors federal law on the issue, the court concluded that it was correct to take note of what the Supreme Court had said.

Therefore, "there must be some common thread that holds the claims together," Justice John Weimer wrote. "With regard to causation, plaintiffs failed to present sufficient evidence to prove the existence of that common thread."

Lasting impact?

For trial lawyer Summy, Wal-Mart v. Dukes is just one of a series of decisions that have made it harder to secure class certification in recent years.

The ruling means that lawyers representing plaintiffs will need to "use common sense in requesting certification of classes" especially in a legal climate in which courts are "more stringent than ever on granting class certifications," he added.

The post-Wal-Mart court rulings so far also illustrate how keen the defense bar is to make the most of the Supreme Court case, according to Richard Samp, a lawyer at the conservative Washington Legal Foundation.

"The decision is being cited by virtually every defendant who is opposing class certification," he said.

Click here to read the Michigan court ruling.

Click here to read the 3rd U.S. Circuit Court of Appeals ruling.

Click here to read the Louisiana court ruling.

 
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